CoreLogic’s regional rental index recorded a 2.3% increase in the three months leading up to January 2023. This clearly shows the rise of the rental market impacting investor’s investment strategies.
However, the growing market makes rentvesting an appealing alternative in Queensland for investors.
Rentvesting is an investment technique allowing an individual to reside in a preferred suburb while investing in a property elsewhere. This can be a great way to accomplish your investment goals without affecting your desired lifestyle. And before rentvesting, several factors must be considered including property’s cost, rent, rental market, and rental management.
Likewise, before rentvesting one must know the risks involved in it and do detailed research. Here are some pros and cons that you should be aware of as an investor who lives in Queensland.
Real estate experts say Queensland's future home buyers should turn to 'rentvesting' – or risk being priced out of the property market altogether. @AbbeyGeran #9News pic.twitter.com/GMapDHQYZk
— 9News Queensland (@9NewsQueensland) September 7, 2023
Pros of Rentvesting in Queensland
Investment with Less Money
This is the main reason why most investors prefer rentvesting over other strategies. Rentvesting allows you to be involved in property investment with less money. You can simply offset the mortgage payments with the rent you receive from the investment property.
Potential Wealth Growth
Even if the investor is staying in a rented property. They can easily invest in properties where there is a chance of potential growth. Hence, rentvesting lets the investor enjoy more returns while residing in different places.
Enjoy Tax Benefits
Rentvesting comes along with many tax benefits. You can benefit from your tax deduction on investment property. This not only helps to claim your tax deduction but also reduces your overall tax bill.
Cons of Rentvesting in Queensland
No Criteria for the First Home Grant
As, being a rentvestor you won’t be living in a home that you buy. For this reason, you won’t be eligible for the first home grant which is given by the government as financial aid.
Extra Expenses
Residing in a rented house costs you to pay the rental amount on a monthly basis. Along with the rent you also have to pay for the property management expenses where you invest. This leads to an increase in the extra expenses.
Uncertainty of the Market
The property market is uncertain so it can change at any time. The property’s value can go up or down due to the other factors. If your property’s value goes down, you can certainly go into loss.
Depending on your investment circumstances and investment goals you need to adopt the right strategy. And more than that your research and time frame also affects your strategy.
If you are thinking to get the best returns then contact our team of experts.
